KB Home (NYSE:KBH) and TRI Pointe Group (NYSE:TPH) are both small-cap construction companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.
Earnings and Valuation
This table compares KB Home and TRI Pointe Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|KB Home||$4.37 billion||0.40||$180.59 million||$1.85||10.63|
|TRI Pointe Group||$2.81 billion||0.55||$187.19 million||$1.42||7.71|
Risk & Volatility
KB Home has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, TRI Pointe Group has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500.
This is a summary of current ratings and price targets for KB Home and TRI Pointe Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TRI Pointe Group||1||7||5||0||2.31|
KB Home currently has a consensus target price of $30.76, suggesting a potential upside of 56.48%. TRI Pointe Group has a consensus target price of $16.67, suggesting a potential upside of 52.28%. Given KB Home’s higher probable upside, analysts clearly believe KB Home is more favorable than TRI Pointe Group.
This table compares KB Home and TRI Pointe Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TRI Pointe Group||7.51%||14.09%||7.22%|
KB Home pays an annual dividend of $0.10 per share and has a dividend yield of 0.5%. TRI Pointe Group does not pay a dividend. KB Home pays out 5.4% of its earnings in the form of a dividend.
Insider and Institutional Ownership
83.0% of KB Home shares are held by institutional investors. 8.6% of KB Home shares are held by insiders. Comparatively, 1.7% of TRI Pointe Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
About KB Home
KB Home operates as a homebuilding company in the United States. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, and active adult homebuyers. The company also provides property and casualty insurance, as well as earthquake, flood, and personal property insurance to its homebuyers; title services; and mortgage banking services, including residential mortgage loan originations to its homebuyers. It has operations in California, Arizona, Nevada, Colorado, Texas, Florida, and North Carolina, The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is headquartered in Los Angeles, California.
About TRI Pointe Group
TRI Pointe Group, Inc. engages in the design, construction, and sale of single-family detached and attached homes in the United States. It operates a portfolio of six brands across eight states, including Maracay Homes in Arizona; Pardee Homes in California and Nevada; Quadrant Homes in Washington; Trendmaker Homes in Texas; TRI Pointe Homes in California and Colorado; and Winchester Homes in Maryland and Virginia. The company sells its homes through own sales representatives and independent real estate brokers. It also provides financial services, such as mortgage financing, title, and property and casualty insurance agency services. The company was founded in 2009 and is headquartered in Irvine, California. TRI Pointe Group, Inc. was formerly a subsidiary of Weyerhaeuser NR Company.
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